Current Risks
Cyber-Attacks and Data Breaches tops the list of risks for businesses in Ireland, indicating that leaders are closely monitoring the increasing frequency and growing impact of potential attack. Major cyber incidents are resulting in greater operational and financial damage, with successful attacks typically triggering a 9% decrease in shareholder value for firms in the year after the attack, according to the 2023 Aon Cyber Resilience Report.
Findings from the GRMS show that the majority of firms in Ireland (94%) have a formal plan or are reviewing processes to mitigate against cyber risk, demonstrating that companies are acting proactively to protect and create business value. The importance of addressing cyber risk is also clear at a global level where cyber risk is the top current and predicted future risk.
With an exceptionally tight labour market, and stiff competition for specialised talent, creating significant challenges for businesses, failure to attract or retain top talent has risen eight places from the last survey in 2021 to number five in the top risks identified in Ireland.
Along with their employees, Irish businesses face increased cost pressures. These pressures make it difficult to increase pay for existing staff or offer competitive wages for recruiting new employees, particularly in specialty fields. Without adequate staffing in key roles, organisations struggle to innovate, implement necessary changes and keep up with demand.
Economic Slowdown/Slow Recovery has fallen four places since 2021 to number six in the current risks facing Irish businesses, with inflationary pressures and high-interest rates creating economic and financing challenges for companies.
The risk posed by climate change has also risen significantly up the agenda for Irish firms – up 21 places to tenth in the top current risks facing Irish firms. When looking at future risk, climate change is ranked as the fourth most significant issue facing businesses, indicating its impact on businesses is quickly becoming more acute.
The shifting geopolitical and economic landscape globally is having a clear impact in Ireland, with business disruption and supply chain or disruption failure making up the top three risks facing companies across the country. The disruption to supply chains linked to geopolitics and global conflicts has also been shown to be some of the most damaging for firms in Ireland, with 67% of organisations suffering losses due to Supply Chain or Distribution Failure and 75% because of Commodity Price Risk/Scarcity of Materials.
Future Risks
Future Risks: Ireland
- Cyber Attacks/Data Breach
- Regulatory/Legislative Changes
- Commodity Price Risk/Scarcity of Materials
- Climate Change / Failure to Attract or Retain Top Talent / Supply Chain or Distribution Failure
Alongside asking Irish businesses to select their current risks, we also asked them to predict what their 5 most critical risks would be in three years’ time (2026). It is perhaps no surprise that the number one spot remains the same with cyber risk topping the list.
It is interesting to see legislative and regulatory change moving five places up the list when it comes to future risks. Again, this is probably not a surprise considering there are various legislative developments coming down the tracks related to pension auto-enrolment, pay transparency and ESG reporting.
When looking at future risk, climate change is ranked as the fourth most significant issue facing businesses, which sees it move up six spots from tenth place on the current list of risks. This shows that while respondents see other risks as more immediate, they are concerned about the future impacts of climate risk. Indeed, companies will soon be affected by EU reporting requirements as well as the 2030 Climate Target Plan publishes by the European Commission In anticipation of further focus on climate activity and reporting requirements, Irish organisations would be well advised to ready themselves and create a climate risk register.
